Moody's assigns B3 to Norgine, loans

Moody's Ratings said it assigned a B3 corporate family rating and B3-PD probability of default rating to Spinnaker Debtco Ltd. (Norgine), the top entity of Norgine's banking restricted group. The agency also assigned B3 instrument ratings to Norgine's planned senior secured term loan due in 2031, and to the proposed senior secured revolving credit facility due in 2030. The outlook is stable.

The B3 ratings capture Norgine’s market position of its three primary products Movicol, Xifaxan and Plenvu/Moviprep across the company’s key markets in Europe.

“Over the next 12-18 months, the agency expects Norgine to grow in the mid-to-high single-digit range in percentage terms thanks to continued growth in the company's largest products, and Movicol's expansion into consumer healthcare, the latter should accelerate from 2025. In 2024, credit metrics will be weak with a Moody's-adjusted gross leverage at around 6.4x in 2024 and negative Moody's-adjusted free cash flow (FCF) because of high investment costs related to the operational excellence program.

“The agency expects organic deleveraging prospects from 2025 once non-recurring items reduce and forecast a Moody's-adjusted gross leverage trending below 6x with a Moody's-adjusted FCF increasing towards €30 million, and a Moody's-adjusted EBITA to interest expense around 2.5x,” the agency said in a press release.

The company is looking to refinance its debt and fund transaction fees and expenses, with the planned loans.

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